I still can't create duplicate categories/slugs and I don't want to hack Wordpress core files, which is the solution provided on ticket #9335...

It's a major issue when you use Wordpress as a CMS and there are a lot of comments and messages about it. Wordpress is the best blog platform but this bug is ruining any attempt to use it as a real CMS.

Doh. Low priority. So what do we do until a solution is found? Can you guys propose a 'fix', maybe using taxonomies?

there is none, short of not using the taxonomy api. basically, the way the taxonomy api is designed, a term lives by itself, and it can be part of several taxonomies... once. the abstract way to say this is: the taxonomy API is hugely wrong in that it amounts to modeling nodes, rather than node links as it should.

I've set low priority simply because it seems rather clear to me, based on core dev discussions, that changing this is low priority indeed. Changing the way it works requires significant schema and API changes, I don't see this happening anytime soon.